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Issues involved: Disallowance of claim u/s.10(10C) of IT Act.
Summary: Issue 1: Disallowance of claim u/s.10(10C) of IT Act The appeal was filed by the Assessee against the order of the ld.CIT(A)-IV, Baroda regarding the disallowance of claim u/s.10(10C) of the IT Act. The Assessing Officer (AO) initiated proceedings to verify the exemption claim u/s.10(10C) in relation to the "Exit Option Scheme" of the State Bank of India. The AO disallowed the claimed amount of &8377; 5 lacs, stating that the ex-gratia payment under the scheme did not comply with Rule 2BA guidelines, thus not eligible for exemption u/s.10(10C). The ld.CIT(A) upheld the disallowance, noting that the scheme was not for right-sizing but for providing an exit route for demotivated employees, and did not meet the requirements of section 10(10C) r.w.rule 2AB. The appellant relied on certain decisions to support their case. Issue 2: Interpretation of legal precedents During the hearing, reference was made to a decision by a Coordinate Bench in a similar case involving the State Bank of India's scheme, where the exemption u/s.10(10C) was allowed. The appellant's case was supported by legal precedents, and it was argued that if a decision of a High Court exists on an issue and there is no contrary decision, then the decision of other High Courts should be followed. Based on this, the Tribunal held that the appellant was entitled to the exemption under the law, similar to the decision in the referenced case. Conclusion: Considering the legal precedents and the decision of the Coordinate Bench in a similar case, the Tribunal allowed the Assessee's appeal, holding that the Assessee was entitled to the exemption u/s.10(10C) of the IT Act. The disallowance of the claimed amount was overturned, emphasizing the applicability of legal principles and precedents in determining the eligibility for exemption under the law.
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